GAME OVER: Juan Ramón Rallo gets it wrong

Juan Ramón Rallo and his 'Game Over': print money or bail out banks?

700 billion dollars. That is the amount the Federal Reserve created in 2008 to prevent a financial collapse. The dollar did not crumble and the global economy was revived. Yet when a similar issuance is proposed to fund social spending or pay public wages, the very people who applauded the bank bailout cry out against inflation. This paradox is the core of Juan Ramón Rallo's latest video, which has peine the debate on the limits of monetary policy.

The fine line between liquidity and waste

One of the recurring criticisms of Rallo's thinking is that he confuses two radically different concepts. The emergency liquidity injection into banks in 2008 averted a systemic collapse: the money stayed within the financial system and, to a large extent, was repaid with interest. It was not a mass handout to the population. By contrast, printing currency to finance recurring public deficits is a long-term cancer, because it erodes the value of money and creates no real wealth. The distinction is surgical: lending to the system when the credit tap runs dry is one thing; handing out money to citizens so they can consume without producing is quite another.

The China mirage

The case of China inevitably crept into the debate. Beijing prints yuan with no apparent restraint, its currency is not a global reserve currency, and yet it does not suffer hyperinflation. Why? The answer lies in its state capitalism model. China has ironclad capital controls, a captive population of 1.4 billion consumers, and a political system capable of suppressing any sign of unrest. Moreover, it exports its inflation to the rest of the world by buying raw materials and capital goods. It is not comparable to an open, democratic economy like Spain's, where money printing ultimately feeds into prices, wages and, finally, the street.

The background noise: immigration and nostalgia

At several points the debate drifted towards immigration as a scapegoat for job insecurity. The argument goes that the arrival of foreign labour devalues wages and makes housing more expensive. However, the data show that the problem is not immigrants but an economic model based on low value-added sectors, labour legislation that encourages temporary contracts, and a tax system that punishes those who produce. Nostalgia for the peseta appears here as an emotional refuge: people remember a Spain where a single worker's wage bought a house and supported a family of four children, but they forget that Spain back then was poorer, with fewer opportunities and credit that was practically nonexistent.

The question nobody answers

In the end, the dilemma remains open: can money be printed without consequences when the issuer is a small, open economy like Spain's? Advocates of monetary expansion point out that the ECB has already done it, and that today's inflation stems not from issuance but from external factors such as energy and supply chains. Critics, like Rallo, insist that every issuance is a hidden tax paid by savers. Meanwhile, the average citizen watches their purchasing power shrink, and politicians still fail to explain why bailing out banks is necessary while bailing out people is a risk.

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